The Securities and Exchange Commission (SEC) is looking to hire 20 new investigators and litigators for its Crypto Assets and Cyber Unit.
The SEC is beefing up its numbers as it looks to lead federal oversight of the crypto industry in the United States.
“Crypto markets have exploded in recent years, with retail investors bearing the brunt of abuses in this space,” said SEC Enforcement Director Gurbir S. Grewal.
According to SEC chairman Gary Gensler, the industry has been operating like the “Wild West,” with his agency responsible for more than 100 cryptocurrency enforcement actions worth $2.35 billion since 2013, most of which were settled out of court.
Twenty new staff will be added to the Crypto Assets and Cyber Unit, formed in 2017 to deal with a boom in coins being marketed to the public.
The new appointments would take the number of attorneys in the unit to 50, and also fill a soon-to-be-vacated senior position made available by the departure of the agency’s current head.
“The bolstered Crypto Assets and Cyber Unit will be at the forefront of protecting investors and ensuring fair and orderly markets in the face of these critical challenges,” Grewal added.
SEC chairman says crypto fertile ground for scams
Gensler reasons that the crypto industry is fertile ground for scams to thrive and has pushed crypto companies to register with the agency.
Under Gensler, the SEC filed 20 enforcement actions last year against Initial Coin Offerings which were deemed to have broken Sections 5(a) and 5(c) of the Securities Act.
It is possible that several new initiatives announced by Gensler on April 4 will land on the desk of the new employees, although Gensler did not specify a time frame in his speech.
The initiatives, designed to protect investors, will explore the separation of asset custody to protect investors in the event of an exchange hack. Also, the SEC will link up with the Commodities and Futures Trading Commission (CFTC) to oversee exchanges offering commodity tokens.
The scrutiny of non-fungible tokens (NFTs) will become more critical as metaverse initiatives like Yuga Labs’ Otherside game and play-to-earn games like Axie Infinity gain popularity.
Investor protection may come into sharp focus if some NFTs bear the legal marks of securities but are unregistered, prompting enforcement action from the SEC.